Japan Shares Climb to Three-Week High on U.S. Debt Deal

Oct. 17 (Bloomberg) -- Japanese shares rose, with the Topix
index climbing to a three-week high, after the U.S. Congress
voted to end the government shutdown and raise the debt ceiling,
ending the nation’s fiscal impasse.

Nissan Motor Co., an automaker that gets 34 percent of
sales in North America, added 2.2 percent. Kansai Electric Power
Co. gained 2.8 percent after the utility reported preliminary
profit that beat forecasts. Fujitsu Ltd. surged 5.7 percent
after Goldman Sachs Group Inc. boosted its outlook on the
computer-service provider. Sharp Corp. slid the most on the
Nikkei 225 Stock Average after Deutsche Bank AG cut its price
target on the TV maker.

The Topix gained 0.8 percent to 1,206.25 at the close in
Tokyo, its highest since Sept. 27. All but three of the 33
subsectors climbed. The Nikkei 225 added 0.8 percent to
14,586.51. The yen strengthened 0.3 percent to 98.44 per dollar
today after sliding 0.6 percent yesterday.

“At least one of the problems has been solved for now,”
said Ayako Sera, a Tokyo-based market strategist at Sumitomo
Mitsui Trust Bank Ltd., which has the equivalent of $360 billion
in assets. “Investors who had sold their risk positions are now
buying them back to a level where they can sit and hold for a
while. But the consensus was for a resolution and it has largely
been priced into stocks.”

Futures on the Standard & Poor’s 500 Index slipped 0.2
percent. The measure yesterday added 1.4 percent as the leaders
of the Senate reached a bipartisan agreement to end the fiscal
impasse and increase U.S. borrowing authority.

The House of Representatives today voted 285-144 to halt
the 16-day government shutdown the day before U.S. borrowing
authority was scheduled to lapse as lawmakers engaged in their
fourth round of fiscal brinkmanship in less than three years.
The Senate had earlier voted 81-18 in the deal’s favor.
President Barack Obama has signed the bill, the White House
said.

Borrowing Authority

If no solution had been reached, the U.S. would have
exhausted its borrowing authority today and faced default,
according to the Congressional Budget Office. Fitch Ratings put
the world’s biggest economy on watch for a possible credit
downgrade yesterday, citing lawmakers’ inability to agree.

“Investors who were waiting on the sidelines, as well as
those who were short, will be buying shares again,” Mitsushige
Akino, chief fund manager at Ichiyoshi Asset Management Co.
“Many of the big-cap stocks are likely to be bought.”

Fujitsu gained 5.7 percent to 409 yen for the biggest
advance on the Nikkei 225. The maker of semiconductor, computer
and communication equipment was raised to buy from sell at
Goldman Sachs with a target price of 480 yen.

Toko Climbs

Toko Inc., a maker of semiconductors and power supplies,
rose 3.3 percent to 344 yen. Murata Manufacturing Co., a
supplier of components to Apple Inc. and Samsung Electronics,
may need to increase its 300-yen-a-share bid for Toko to ensure
support for its offer, according to Lee Mitchell, a special
situations sales trader at Religare Capital Markets Ltd. in
Singapore. Murata added 0.9 percent to 7,590 yen.

Sharp declined 3 percent to 290 yen, the biggest drop on
the Nikkei 225. Deutsche Bank, which maintained its sell rating
on the company, cut its price outlook for the shares to 122 yen
from 210 yen.

The Topix traded at 1.26 times book value today, compared
with 2.53 for the S&P 500 and 1.77 for the Stoxx Europe 600
Index yesterday. Volume on the Japanese gauge was 25 percent
below its 30-day average today. Its 30-day historic volatility
was at 16.11 today, compared with its five-year median of 19.31.